By James Atkinson

Gage Roads has attributed a half-year decline in sales of its proprietary products to a failure to achieve full ranging and distribution during the Christmas period.

Sales of Gage Roads products declined by 19 per cent in the half year to December 31, 2014, despite the launch of its new and refreshed brands in the second quarter.

"Achieving full ranging and distribution during this busy Christmas period was more challenging than expected," the company said.

"As a result, our products did not enjoy the full ranging or shelf presence during the peak sales period. This is being rectified and we expect to achieve planned ranging in the coming quarter."

Gage Roads said sales were strong in stores that did have reasonable ranging of the new products, "providing the business early indication that the re-fresh will deliver an uplift in sales once full ranging has been achieved".  

The company reported a decline in total carton and keg sales have declined of eight per cent on the previous corresponding period with revenue also falling by eight per cent.

Its sales to contract brewing customers declined by six per cent over H1 FY14, which was attributed to the introduction of a warehouse strategy resulting in the reduction of customers' inventory levels.

The company also pointed to a "category-wide softening of the beer market" during the quarter as a key driver of the decline.

Australian Quality Beverages

Gage Roads announced it had registered the business name Australian Quality Beverages and its contract brewing services will now be carried out under this name. 

"This is designed to provide a clear consumer brand differentiation between the Gage Roads proprietary craft brands and our contract brewing services business," it said.

Liquor market outlook poor

Managing director John Hoedemaker said the upcoming half-year will likely provide lower volumes than initially expected as the liquor market softened during the traditionally strong summer months. 

However, he said he remains confident of the brewer's longer term prospects.

"Despite the initial ranging issues, the company's proprietary brands are being well received," he said. 

"With this in mind and with the continuing focus of our contract customers to drive their beer portfolios, we expect to see strong sales growth and ultimately deliver earnings to shareholders in line with our long-term strategic plan."

The Shout Team

The leading online news service for Australia's beer, wine, spirits and hospitality industries.

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  1. As an Independent Bottleshop, the one main reason I don’t stock or support Gage Road beers, is that they are part owned by Woolworths.I see no point in putting more money into Woolworths directly or indirectly.

  2. Having their cake and not quite eating it too! Terrible business model that competes with their customers. While being their customer.

  3. Maybe sales decline as they tried to re-brand packaging/recipes in an already crowded market for mainstream boring beers. Viewed in the market of beer drinkers as a Woolworth’s Home Brand beer.

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